Inside Health

OUTLOOK ON THE WORKPLACE; How Is the Game Played Now?

By STEVE LOHR

Published: December 5, 2005

When Vincent Papke joined I.B.M. in 1963, the implicit bargain was simple -- his labor and loyalty for security. Getting rich was not an expectation, but a steady job and regular raises were. The company, he recalled, was a kind of extended family. There were company basketball and softball teams, company activities for the kids, and company social gatherings like Christmas parties.

''They trained you,'' he said. ''You worked hard, you played hard and you advanced.''

So it was for Mr. Papke over the next three decades, as he rose from an accountant to a series of management and marketing jobs. ''You would never leave -- you had a cradle-to-grave mentality,'' said Mr. Papke, 63, who took a buyout package and did leave I.B.M. in the early 1990's, when the company was struggling and cutting its payroll.

Steven Cohn, 29, came to I.B.M. earlier this year with a very different mentality. He worked previously at an investment bank and an Internet advertising company, and then got an M.B.A., before signing up with I.B.M. as a software salesman.

Mr. Cohn has a checklist of things he looks for in an employer. He should be excited, he said, by the vision and strategy of the company, its management and by the opportunities he will have to make contributions, add to his skills and further his long-range career goals. Compensation, he said, should be based on merit and his market value.

The two men can be seen as bookends that illuminate how much the corporate social contract has been transformed for managerial and skilled professional workers in America. Clearly, the old loyalty-for-security bargain that underscored Mr. Papke's career is fading in corporate America. But what is the new social contract? What are the reasonable expectations of the rights and responsibilities of companies and workers these days?

There is no simple answer, according to human resources experts. But they agree that certain elements of the new company-employee deal are evident. For companies, the emphasis is no longer on ''happy'' workers who have a lasting commitment to a company. Instead, the new mantra is to have employees who are ''productive'' and ''engaged,'' human resources experts say. Pay and bonuses are based on performance measures instead of seniority.

''It's an, 'If you give, you'll get' model,'' said David Ulrich, a professor at the University of Michigan business school. ''That's kind of the productive contract.''

For Mr. Cohn's generation, Professor Ulrich said, corporate loyalty is seen as a market transaction -- a bond that will last as long as it clearly benefits both the employee and the company. ''It's very much at-will employment,'' he said.

This transformation is a byproduct of rapid technological change, the globalization of business and faster-moving markets in industry after industry. The result of these changes is that it is far more difficult for corporations to provide an institutional buffer to protect either themselves or their employees from market disruptions.

I.B.M., one of the nation's largest employers of managerial and skilled professional workers, like scientists and engineers, has undergone a sweeping transition. After being battered in the late 1980's and early 1990's when it failed to adapt to the challenge of innovative, fleet-footed rivals, the company recovered first by cutting costs, and then becoming less a manufacturing company and more a supplier of sophisticated technology services. Today, the company employs about 330,000 people worldwide (40 percent of them in the United States), up from 220,000 worldwide in 1994, though below its peak of more than 405,000 in 1985.

I.B.M., like many other companies, has rewritten the implied social contract with its employees. Cutbacks and controversy have been part of the process. I.B.M. placed a cap on medical benefits for retirees, and eliminated the traditional pension plan for new hires. And a federal judge ruled in 2003 that changes I.B.M. made in its pension plan amounted to discrimination against older workers.

In the modern workplace, most managers and skilled professionals accept, even embrace, the market-oriented productive model, human resources experts say. Yet, according to Mr. Ulrich, these workers also want to be inspired by the vision of the company, its reputation, and be confident they can have an impact on the work of the company -- a litany that echoes the checklist of the young I.B.M. software salesman, Mr. Cohn.

''Work is about more than productivity,'' Professor Ulrich said. ''For all our emphasis on individualistic, market competition, people still want to find meaning in their work and in the institutions that employ them.''

A career at one company will be a rarity, given how quickly markets shift these days. ''The best a company can honestly do is give workers a glimpse of where the company is headed and how they might fit into it,'' said Peter Cappelli, the director of the Center for Human Resources at the University of Pennsylvania's Wharton School.